China Steel Corp books pretax profit month-on-month

By Kevin Chen / Staff reporter

Wed, Sep 05, 2012 - Page 14

China Steel Corp (CSC, 中鋼), the nation’s only integrated steelmaker, yesterday posted a pretax profit of NT$712 million (US$23.81 million) for last month, down 61.11 percent from a year earlier, but up 1.04 percent from the previous month.

Sales declined 18.68 percent year-on-year and that was down 7.08 percent month-on-month to NT$16.83 billion last month, the Greater Kaohsiung-based company said in a filing to the Taiwan Stock Exchange.

CSC has lowered its domestic steel prices by more than 10 percent over the last two months and plans to cut its utilization rate this month, as demand is weak and the outlook for the sector remains bearish in the fourth quarter.

The company is aiming to maintain profitability for the whole year and has high hopes for the traditional peak October-to-December season, but prices have been tumbling in the face of expansion by Chinese companies to secure market share.

In the first eight months of the year, CSC’s pretax profit plunged 84.2 percent to NT$3.35 billion from a year earlier, while accumulated sales dropped 9.84 percent to NT$145.62 billion, company data showed.

Grand Cathay Investment Services Corp (大華投顧) analyst Tsai Yen-ling (蔡燕鈴) said CSC's pretax profit for last month was better than her estimate, allowing her to revise upward its full-year profit forecast. Still, the company might report its lowest net profit this year in a decade, she said.

Tsai said she now predicted CSC’s net income would drop 70.9 percent to NT$5.67 billion, or earnings per share of NT$0.38, this year, from NT$19.5 billion, or NT$1.36 per share, last year. Revenue is likely to fall 12.55 percent to NT$210.2 billion from the year before, she said in a note yesterday.